Malaysia stock market and companies daily report (May 08, 2014)

Malaysia’s Exports Weighed Down By Weaker Demand From Major Trading Partners

- According to data from the Statistics Department, Malaysia’s export growth slowed in March to an annualised 8.4 percent, lower than the 9.2 percent expected by economists in a Bloomberg survey. Imports also weakened considerably to a 0.5 percent growth from 9.5 percent in February and 7.2 percent in January.

- For the first quarter, exports gained 10.9 percent year-on-year, while imports climbed 5.5 percent, lower than the 6 percent expansion seen a year ago.

Significance: Analysts are confident that a gradual recovery in the advanced economies, particularly the US and the European Union, will continue to support external trade in Malaysia. This will help underpin the central bank’s target of 5 percent to 5.5 percent in GDP growth for the year.

AirAsia’s Indian Joint Venture Receives Operating Permit

- AirAsia‘s low-cost Indian joint venture airline has received the last approval required to launch an airline in India. The Directorate General of Civil Aviation issued the air operator the operating permit after over a year since the venture was announced.

- It was not immediately known when AirAsia India, a tripartite venture between the Malaysia-based low-cost airline, India’s Tata Group and investment firm Telestra Tradeplace, would start services.

- AirAsia India has said it will offer one of the lowest fares to lure travellers and will rapidly expand its fleet by adding 10 Airbus A320 planes a year.

Significance: In a market where high fuel prices, taxes and fees have squeezed existing Indian airlines, AirAsia India is looking to price their tickets nearly 35 percent lower than the average fares in the market currently. According to AirAsia India’s chief executive Mittu Chandilya, the airline can still make money despite offering lower fares.

Zhulian Invests RM35m In Upgrades

- Zhulian Corporation is investing RM35 million to set up new production facilities and upgrade its existing machinery.

- Of the RM35 million, RM7.7 million had been earmarked for a new plant in Bayan Lepas that would be used for the production of home and personal care products. The facility is expected to be operational by 2015.

- RM15.8 million will be used to upgrade to its current good manufacturing practice three-storey plant in Bayan Lepas. Another RM3.5 million would be spent to equip a new level with machinery, which should be ready to start operations in 12 months. The balance will be spent on upgrading the firm’s production equipment and machinery.

Significance: The capital expenditure allocation was made in the company’s anticipation of a rebound in the local as well as overseas demand in the next financial year.